• Compared to 2015, 2016 and 2018, fewer days of critical navigating conditions were recorded for the years 2019, 2020 and 2021 on the Rhine. Nevertheless, water levels and navigating conditions deteriorated in late 2021, thereby inflicting temporary losses for cargo transport on the Rhine. On average, days with critical low water conditions are slightly more frequent on the Danube than on the Rhine.
• For 2021, the dry bulk spot market index and container freight rate index remained on a recovery trend. The liquid bulk freight index has not shown such a positive trend in the last two years due to the weak transport demand for liquid bulk caused by the pandemic.
• Spot market data for liquid cargo in the FARAG region confirm the difficult market environment for liquid bulk in 2020 and 2021. The calculated freight rate indices for gasoil and biodiesel show a downward trend for the most part of these two years.

 

WATER LEVELS AND AVAILABLE DRAUGHTS

  • The overall performance of inland waterway transport is essentially linked to water levels, which determine the amount of cargo that a vessel can load and transport under safe navigation conditions. The load factor (ratio of cargo loaded to loading capacity of the vessel) influences the profitability of inland waterway transport. A high load factor means a high volume of cargo transported per trip, and therefore a high level of revenues for a vessel, for any level of fixed costs.
  • Although the reduction of the load factor could be compensated by putting more vessels into operation, there are obvious limitations to this.28 Low water periods therefore reduce the overall cargo transport on inland waterways. An example is the low water period in autumn 2018.
  • The amount of cargo that a vessel is able to load at a certain water level, while keeping safe navigation conditions, is determined by the available draught. Draught hereby means the distance between the waterline (or the intersection of the water level with vessel ship hull) and the keel or bottom part of the vessel, as can be seen in the figure below. The total vertical distance, by which a sailing vessel sinks into the water also comprises the ‘squat’. The latter results from hydrodynamic effects and leads to a higher draught of a sailing vessel compared to a vessel at rest. The squat effect is stronger the less water there is under the vessel, and the faster it is sailing.
  •  

    FIGURE 1: ACTUAL WATER LEVEL, ACTUAL DRAUGHT, EQUIVALENT WATER LEVEL MINIMUM NAVIGATION CHANNEL DEPTH AND POSSIBLE OR AVAILABLE DRAUGHT AT KAUB/MIDDLE RHINE

    Source: CCNR based on German Federal Institute of Hydrology (BfG) (2015)
    * The distances in this drawing are not at scale. In this illustration, the date chosen to determine the available or possible draught is 3 September 2020, when the actual water level was 239 cm on average. The actual draught contains also the squat effect.

     

  • The waterway administrations recommend calculating the available draught on the basis of the actual water level and certain waterway parameters, in the following way:29
    Actual water level
    – Equivalent water level
    + Minimum navigational channel depth
    = Actual fairway depth
    – Under keel clearance
    = Available or possible draught of vessel
  • For the Rhine in Germany, the equivalent water level is a low water level under which, on a 100-year average, the water levels do not fall below more than 20 ice free days per year. The minimum navigational channel depth corresponds to the minimum depth that should be present in the area of the fairway (depth of the fairway box below the equivalent water level). This minimum depth is related to the equivalent water level, as it is the channel depth, that waterway managers aim to achieve even under critical low water situations.
  • If water levels drop below the equivalent water level, the minimum navigation channel depth can no longer be achieved. In order to assess the stability of navigating conditions for a particular year, it is therefore straightforward to determine the number of days per year on which the actual water levels fell below the equivalent water level.
  •  
     

THE DEVELOPMENT OF THE AVAILABLE DRAUGHT FOR RHINE AND DANUBE GAUGE STATIONS

    RHINE GAUGE STATIONS

    • For important Rhine gauge stations, the parameters are listed in Table 1.
    •  

      TABLE 1: HYDRAULIC PARAMETERS FOR IMPORTANT RHINE GAUGE STATIONS *

      Gauge stationMinimum navigation channel depth Equivalent water level
      Duisburg-Ruhrort (Lower Rhine)280 cm233 cm
      Cologne (Lower Rhine)250 cm139 cm
      Kaub (Middle Rhine)190 cm78 cm
      Oestrich (Middle Rhine)190 cm87 cm
      Maxau (Upper Rhine) 210 cm369 cm

      Sources: German Federal Waterways and Shipping Administration and Swiss Association for Shipping and Port Management
       

    • For these five Rhine gauge stations, daily water level data were collected and analysed. The reason for using daily data is that when evaluating navigating conditions on a river, it is important to know the number of days per year when certain navigation conditions were present. The use of monthly averages could lead to a bias within such an evaluation, as high and low water levels would cancel each other out.
    • If water levels drop below the equivalent water level, the minimum navigation channel depth can no longer be achieved. In order to assess the stability of navigating conditions for a particular year, it is therefore straightforward to determine the number of days per year on which the actual water levels fell below the equivalent water level. Table 2 shows this number of days for the above-mentioned gauge stations.
    •  

      TABLE 2: NUMBER OF DAYS PER YEAR WITH A WATER LEVEL BELOW THE EQUIVALENT WATER LEVEL – IMPORTANT GAUGE STATIONS ALONG THE RHINE30

       KaubOestrichMaxauCologneDuisburg
      20152923303739
      20161918272635
      20172827282325
      20181077880121128
      201900003
      20200001114
      20211046913
      Average 2015-20212821243237

      Sources: CCNR calculation based on data from German Federal Waterways and Shipping Administration, provided by the Federal Office of Hydrology
       

    • Compared to 2015, 2016 and 2018, the years 2019, 2020 and 2021 were, overall, years with fewer days of critical navigating conditions on the Rhine.
    • Infrastructural works that are currently in the planning approval procedure, foresee an increase of the depth of the fairway at low water from 1.90 metres to 2.10 metres (= increase of the minimum navigational channel depth) in the Middle Rhine valley between Budenheim and St. Goar (encompassing Oestrich and Kaub).31
    •  

    DANUBE GAUGE STATIONS

    • The critical low water level of the Danube is not known as equivalent water level but ‘Low Navigable Water Level (LNWL)’. Its definition is similar, but not wholly identical to the equivalent water level. The LNWL is defined as the water level reached or exceeded at a Danube water gauge on an average of 94% of days in a year (i.e. on 343 days) over a reference period of several decades (excluding periods with ice). In other words, the LNWL is a critical low water level under which the water levels do not fall below more than 22 ice free days per year.32
    • Based on this definition, equivalent calculations can be carried out for the Danube. Two gauge stations on the Danube in Austria are considered (Kienstock and Wildungsmauer), as well as two gauge stations on the Danube in Germany (Pfelling and Hofkirchen).
    •  

      TABLE 3: HYDRAULIC PARAMETERS FOR IMPORTANT DANUBE GAUGE STATIONS *

      Gauge stationMinimum navigation channel depth Equivalent water level
      Pfelling (Upper Danube)200 cm290 cm
      Hofkirchen (Upper Danube)200 cm207 cm
      Kienstock (Upper Danube)250 cm164 cm
      Wildungsmauer (Upper Danube)250 cm162 cm

      Sources: German Federal Waterways and Shipping Administration, viadonau
       

    • The number of days per year, on which the actual water levels fell below the equivalent water level, is shown in Table 4.
    •  

      TABLE 4: NUMBER OF DAYS PER YEAR WITH A WATER LEVEL BELOW THE LOW NAVIGABLE WATER LEVEL – IMPORTANT GAUGE STATIONS ALONG THE UPPER DANUBE

       PfellingHofkirchenKienstockWildungsmauer
      2015106923554
      20162261223
      201738182437
      20181481265691
      20194713430
      20208550432
      202136212248
      Average 2015-202169472245

      Sources: CCNR calculation based on data from German Federal Waterways and Shipping Administration, provided by Federal Office of Hydrology, data from viadonau and from the Federal State of Lower Austria.
       

    • It can be observed that on average, days with critical low water conditions are more frequent on the Danube than on the Rhine.
    • In July 2021, infrastructure works on the 70 km Danube stretch between Straubing and Vilshofen began (encompassing the two gauge stations of Pfelling and Hofkirchen), with the aim of deepening the fairway depth. These works will be carried out over seven years.33 A one-time riverbed dredging of 450,000 cubic metres is necessary to create a greater channel depth. The future annual dredging quantities for maintaining the fairway depth and for securing the riverbed will amount to an average of about 105,000 cubic metres.
    •  
       

FREIGHT RATES IN THE RHINE REGION

    CBS FREIGHT RATE INDEX FOR THE RHINE REGION

    • The freight rate index based on the surveys of the CBS are illustrated in Figure 2. Dry bulk and container freight rates followed an increasing path since the third quarter of 2020, as the underlying transport demand recovered from the pandemic. No such recovery can be seen for liquid cargo freight rates. This stems from a weaker development of transport demand compared to dry cargo, both during and after the pandemic.34 Also, the liquid cargo segment experienced a stronger expansion of its supply side, in terms of a higher newbuilding rate and thus more additional cargo carrying capacity. This changed the supply-demand-relationship and put transport prices under pressure.
    • Freight rates for all cargo types increased in the fourth quarter of 2021, due to the low water period. The strongest increase was hereby noted for dry bulk spot market rates.
    •  

      FIGURE 2: CBS FREIGHT RATE INDICES PER QUARTER (2015 = 100) *


      Source: CBS
      * The prices of established routes are observed twice a quarter and include fuel and low water surcharges but exclude loading and unloading. The time of observation is in the middle and at the end of the quarter. All prices are nominal prices.

       

    PJK FREIGHT RATE INDEX FOR THE RHINE REGION

    • Figure 3 illustrates the liquid cargo spot market freight rate index for gasoil for ARA-Rhine transport (yearly averages). Since 2010 an overall positive trend is captured with three outliers during the low water periods in 2011, 2015 and 2018. For 2021, only a slight upward movement is noticed, mainly for the Upper Rhine.
    •  

      FIGURE 3: PJK FREIGHT RATE INDEX FOR LIQUID CARGO TRANSPORT IN THE ARA-RHINE AREA (2015 = 100)


      Source: CCNR calculation based on PJK International
       
       

CITBO FREIGHT RATE INDEX FOR THE FARAG REGION35

  • For the liquid cargo transport within the extended ARA region, a dataset on spot market freight rates provided by the tanker barge corporation CITBO36 was analysed. Within the spot market data, the shares of the different product groups were as follows:
    – Gasoil and components: share of 40.6% in 2021 (55% in 2020; 50% in 2019, 47% in 2018)
    – Gasoline and components: share of 23.6% in 2021 (21% in 2020; 26% in 2019 and 35% in 2018)
    – Biodiesel: share of 28.0 in 2021 (17.6% in 2020; 15% in 2019 and 11% in 2018)
    – Chemicals: share of 4.7% in 2021 (5.4% in 2020; 9% in 2019 and 8% in 2018)
    – Heavy and other products: share of 3.3% in 2021 (1.1% in 2020; 1% in 2019 and 2018).
  • Of all liquid cargo transported during the period under study (January until December 2021), 34% was loaded in Antwerp, 32% in Rotterdam, 8% in Flushing, 9% in Amsterdam, and 15% in all other ports. Regarding the ports of unloading, around 29% of the volumes were unloaded in Antwerp, 24% in Rotterdam, and 14% in Amsterdam.
  • A freight rate index was calculated for gasoil and components, gasoline and components, and biodiesel, based on the spot market freight rates.37 For these three cargo segments, freight rates followed quite different trends in 2021:
    – Gasoil and components: a clear peak in the fourth quarter of 2021 can be observed. The reason for this lies in the low water period towards the end of 2021.
    – Gasoline and components: a stable development throughout the year 2020 continued in 2021 up to the fourth quarter, where a little peak is noticeable.
    – Biodiesel: the overall downward trend during the year 2020 continued into 2021 up to the third quarter. The low water in the fourth quarter of 2021 led to strongly rising freight rates.
  • Gasoline and its components had the highest average spot market freight rates in absolute terms (€/tonne), as these trips are on average relatively long and therefore have to cover higher absolute costs (more fuel consumption, etc.) Transport of gasoline and components had an average duration of 21 hours, compared to 13 hours for gasoil and components and 10 hours for biodiesel.
  •  

    FIGURES 4, 5 AND 6: CITBO FREIGHT RATE INDEX FOR LIQUID CARGO SEGMENTS (INDEX AUGUST 2017 = 100)




    Source: CCNR analysis based on CITBO spot market freight rates

 
 

FREIGHT RATES IN THE DANUBE REGION

  • Freight rates on the Danube represent an average of transport prices for bulk cargo transport.
  • In September 2021 there was a blockage at river km 365 (in the Bulgarian-Romanian lower Danube stretch) for about three weeks. The blockage concerned both navigating directions and had a negative impact on freight transport and freight rates. In 2021, grain transport on the Middle Danube was influenced by this blockage and decreased by 32% compared to 2020. The decrease mainly took place in the month of September.
  • Although bunkering prices showed a strong increase of 74% in the Danube region in 2021, this was not reflected in the development of the freight rate index for Danube transport. Slight increases were only recorded in Q1 2021 and in Q3 2021, whereas Q2 2021 and Q4 2021 showed a stagnation in freight rates.38